Surge in job applications overwhelms ANZ market as job openings decline

As the job market tightens across Australia and New Zealand, recruiters are facing mounting challenges amid a surge in job applications and a downturn in job creation. According to the newly published Q1-Q2 2024 State of Market Report from recruitment platform JobAdder, recruiters are grappling with an overwhelming influx of applications, while job openings continue to dwindle.

The data reveals that both recruitment agencies and in-house talent acquisition teams are struggling to manage an oversupply of candidates in the job market, making it increasingly difficult to sift through and identify the most skilled and qualified applicants.

Spike in job applications across ANZ

In Australia, the number of job applications per position in recruitment agencies surged dramatically. The average rose from 26.8 applications per job in Q2 2023 to 41 in Q1 2024, before stabilizing slightly at 37.8 in Q2 2024. This marks a year-on-year increase of 41%, and a staggering 165% rise since 2022.

New Zealand saw an even sharper spike, with applications per job increasing from 27.3 in Q2 2023 to 43.9 in Q2 2024, representing a 61% increase in just a year. The dramatic rise in applications reflects the growing imbalance between job seekers and available positions, as candidates scramble for fewer opportunities.

Decline in Job Creation

While candidate supply has surged, job creation in Australia and New Zealand has started to decline. In Australia, the average number of jobs per account fell from 61.9 in Q2 2023 to 58.9 in Q2 2024, a modest yet significant drop. New Zealand, however, experienced a more pronounced decrease, with jobs per account falling from 56.5 to 44.5 over the same period.

Martin Herbst, CEO of JobAdder, highlighted the difficulties this creates for recruiters: "Recruiters are no longer struggling to find candidates—they're inundated with them. The real challenge now is filtering through the high volume of applications to identify the most skilled and qualified candidates. This task has become even more daunting as recruitment teams have shrunk, and the pressure to streamline workflows has intensified."

Shift Towards Temporary Roles

As the economic outlook remains uncertain, businesses are increasingly turning to temporary and contract roles rather than committing to permanent hires. In Australia, 79.4% of recruitment agency placements in Q2 2024 were for temporary positions, up from 76.4% in Q2 2023. New Zealand followed a similar trend, with temporary placements rising to 87.2%, compared to 86.4% a year earlier.

Herbst stressed that agencies must adapt to this shift in hiring practices. "As businesses cut back on permanent hires and bring recruitment in-house, agencies risk losing ground. To stay competitive, they should consider diversifying their offerings, and expanding into temp placements can be a strategic move to drive growth and revenue."

The Growing Dependence on Job Boards

JobAdder’s report also underscores the growing reliance on job boards and ad channels, which have become increasingly popular but also more time-consuming. In Q2 2024, 78% of job applications for recruitment agencies came through job boards, up from 73% in 2023 and 57% in 2022. Despite their convenience, job boards often overwhelm recruiters with unqualified candidates, slowing down the hiring process.

In Australia, placements made from job boards take an average of 16.3 days longer to finalize than those sourced through proactive channels, such as internal databases. Similarly, in New Zealand, the delay is around 15.2 days for permanent roles. In contrast, temp placements sourced proactively were completed up to three weeks faster than those from ad channels.

Herbst pointed out the inefficiency of job boards: "At first glance, job boards might seem like a quick fix, but they often flood recruiters with unqualified candidates, leading to wasted time and resources. Proactive sourcing from internal databases allows recruiters to be more strategic, offering a clear advantage in today’s competitive job market."

In-House Teams Face Similar Challenges

In-house talent acquisition teams across Australia and New Zealand are also feeling the pressure from the rise in job board applications. JobAdder’s report shows that applications from internal databases dropped to just 5.5% in 2024, down from 8% in late 2023. This trend mirrors the challenges faced by recruitment agencies, as in-house teams also find themselves buried under an avalanche of job board applicants.

Herbst advised in-house teams to rethink their sourcing strategies: "With the rise in job board usage, in-house teams must reconsider how they approach recruitment. A greater focus on proactive sourcing can help improve efficiency and ensure a higher quality of candidates."

Adapting to a Challenging Recruitment Landscape

As job applications continue to surge and job openings dwindle, both recruitment agencies and in-house talent acquisition teams in Australia and New Zealand face significant challenges. JobAdder’s latest report highlights the urgent need for recruiters to adapt to the evolving landscape by diversifying their offerings, embracing temporary placements, and focusing on more strategic sourcing methods.

In a tightening job market, the ability to streamline recruitment processes and leverage proactive sourcing will be key to maintaining competitiveness and staying ahead of the curve.